Recently I have been thinking a lot about why musicians and artists earn such shitty amounts of money.

I am not about to become a musician or artist, between the shitty economics and my general lack of music and artistic sense. However, I do have some thoughts about why a big portion of musicians are unable to monetize their work.

The most obvious reason is that content now is expected to be free or almost free. I live in Singapore, so I get to see free music all the time, anytime anywhere. There are Esplanade shows, road shows, online music and piracy etc. Internet in general has brought the cost of music way down, especially digitally. Consumers like me who grew up with internet, no longer expect to pay for anything that is classified as mainstream content. Somewhere in the course of time, free content (and by extension music or art) alone has no longer become sufficient to support monetization.

The problem is that there just ain't no way in hell to earn money on music directly when Spotify only pays artists ONLY 3 CENTS per stream.

Bear with me, but this goes back to basic microeconomics - unlimited supply and limited demand. There are unlimited number of songs - to the extent that no one can hear every single album, but only so much time people are willing to spend listening to music.

That being said, free-ish content isn't useless. It does create a following for the artists. The problem is that despite their followings, the vast majority of artists are not capable nor willing to monetize their audience, for fear of looking like they are doing a money grab. I think this is equal parts imposter syndrome as well as idealism. Artists may feel like they should not be monetizing their audience and should be happy to just have people listening to them. Idealists may even feel that there should not be differentiated access to content and culture because they would not want someone on the streets to be unable to hear their music and change their lives eventually.

To all of that, I say that it is time to change. Artists are valuable assets to our society and they should be compensated as such.

In order to properly value artists, we should go back to what makes them unique. Artists create culture and community. They create a story around which people can rally and pay attention to. They touch the emotions of consumer, instead of trying to persuade them with just cold hard logic and utility. They create a community or perhaps even a common religion over which people can bond over. In that community, the artist is god and its people are willing to give whatever attention they have, however scarce it is in a society devoid of long attention spans.

Obviously when it comes to monetizing attention, the usual playbook is to use advertisement as a direct monetization model. However, I argue that this makes the artist product much weaker, unless the artist personally curates and select to only imbue natural sounding advertisements. This is both time-consuming and non-scalable, as there are only so many ads that you can squeeze into a song/artwork before people start losing their interest and the community starts to churn or leave. Advertising is clearly not the best way to go, although on most platforms, they seem like the only way creators and artists can survive.

Instead, I believe that there should be ideally a mode of monetization that supercharges the community as they consume and creates a sustainable way in which artists can monetize more and more as the community grows.

Well is there such a thing? I think to solve this, we have to first go back to the microeconomic problem of unlimited supply and limited demand. If the problem is that there is too much supply and limited demand, perhaps the best way is to create an exclusive, rivalrous good that is differentiated from something as common as music consumption. Limited supply, unlimited demand (relatively).

That would solve the first problem of not having differentiated goods where people are willing to overpay for. Given a sufficiently large community, there are surely people who are willing to pay more for the rights of owning something that the rest of the community does not have. (also paying for the bragging rights!). These can be things like co-producing a song in the album, spending an hour with your favorite artist, limited edition merch etc. Artists need to be able to tap into these, without having to first spend exorbitant amounts of money in marketing and live events setup.